Yiren Digital Tumbles 15% on Q1 Revenue and EPS Miss

The fintech company will hope for a strong second half.

Author: Anthony Russo   

The stock in Yiren Digital Ltd. (NYSE: YRD) tanked 15% to $4.40 per American depositary share in early trading Wednesday after reporting first-quarter results which missed analyst expectations. 

The Beijing-based fintech company said in a statement today that in the three months through March that revenue was $144.57 million on earnings per share of 3 cents. Analysts were expecting revenue to come in at $209.46 million on EPS of 23 cents. 

It also reported that its loan originations plunged 77% to $300 million in the quarter. 

"For credit performance and the risk management, overall, early delinquencies increased in the first quarter and reached its peak at the end of March due to the pandemic situation before it quickly declined in April and returned to near pre-pandemic level in May," Michael Ji, the Chief Risk Officer of Yiren Digital, said in a statement today.

He added, "Visible progress has been made in prioritizing our business toward higher-quality customers, which was reflected in risk performance and we are glad to see essential improvement trend in 2019 and we expect a more substantially improved trend in 2020."

While Covid-19 certainly had an impact on the Yiren's first-quarter performance, shares of the company have been on a steady decline since hitting a high of $53.50 per share in October 2017. Now the company sits in penny stock territory with a market capitalization of $414.69 million.

Yahoo Finance: YRD.png

(Yahoo Finance: YRD)

Founded in 2012, Yiren provides credit and wealth management services. Under its risk management system, the company assesses the creditworthiness and the price risks associated with borrowers, as well as offering loan investment opportunities to investors. 

While the Yiren did not provide guidance, Ning Tang, the chief executive officer of Yiren told analysts in the company's fourth-quarter conference call that he expects, "business to gradually recover starting in April" and anticipated a "strong second half 2020".

As of March, Yiren had cash and cash equivalents of $451.2 million.